Lehman gets $16.3 billion in claims on defunct brokerage

Lehman Brothers Holdings Inc., which has been fighting affiliates over who owes what to whom since 2008, said its defunct brokerage will allow it to claim about $16.3 billion as a result of a settlement.

The agreement with the Lehman Brothers Inc. brokerage and a London-based unit provides the parent company with $2.3 billion in customer claims on the brokerage, and $14 billion in unsecured claims, the former investment bank said in a statement today.

“The settlement, consistent with the views of the global creditor base, will enable LBHI to accelerate distributions to creditors with allowed claims,” said Daniel Ehrmann, Lehman’s head of international operations, in the statement.

Lehman, which is still liquidating and trying to cut claims after exiting bankruptcy court protection last year, plans a third payment to creditors on April 4. It said in October its largest claim on an affiliate was $15.2 billion owed by its defunct brokerage.

Lehman has so far paid creditors about 9 cents on the dollar, or half of what it expects to pay by about 2016. It said in December that it raised $3.9 billion for creditors in the quarter ended Sept. 30 and another $1.6 billion in October and November, while its $6.5 billion sale of apartment owner Archstone was due to close by March 26.

Lehman had cash of $8.3 billion as of June 30, plus restricted cash of $13.6 billion, including money set aside for disputed claims and debts, the company said today in a regulatory filing. It was owed $45.2 billion by affiliates, including the $15.2 billion claimed from the Lehman Brothers Inc. brokerage and $14.3 billion owed by a Swiss affiliate, Lehman Brothers Finance.

Lehman failed because of too much debt and risky real estate investments, according to a bankruptcy examiner’s report on the biggest bankruptcy in U.S. history.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).